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IRS Issues Procedure Adjusting Tax Credits, Amount Limits for Inflation


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The Internal Revenue Service Oct. 28 issued Revenue Procedure 2010-40, which provides inflation-adjusted amounts for various tax credits, limits, and fringe benefits.

Also Oct. 28, IRS issued inflation adjustments (IR-2010-108) for qualified retirement plans.

Every year IRS issues a procedure identifying changes in amounts for a multitude of tax credits, fringe benefit limits, tax exclusions, and income limits for the coming calendar year. Unlike Rev. Proc. 2009-50, which set limits for 2010, IRS said the new procedure does not include adjustments to tax rate tables, the child tax credit, the earned income credit, the standard deduction, itemized deductions, qualified transportation fringe benefits, or interest on education loans. IRS said those items would be addressed in future guidance.